Medicaid Work Requirements Do More Harm Than Good – posted 5/14/2018

It appears that for now the issue is settled: New Hampshire’s Medicaid program will have work requirements. In early May, the U.S. Center for Medicare and Medicaid Services approved the State’s plan to require most adult Medicaid recipients to work at least 25 hours per week. The plan could apply to as many as 53,200 recipients in the state although many are already working.

Medicaid beneficiaries, adults aged 19 to 64, will be required to participate 100 hours per month in “community engagement activities” such as work, education, job skills training or community service. That “engagement” will be a condition of their health care eligibility.

The new rules do offer important exemptions for the elderly, the medically frail and those people with children.

New Hampshire becomes the fourth state to introduce a Medicaid work requirement. The requirement has been instituted in Indiana, Arkansas and Kentucky and six other states have pending applications for approval. This is quite a departure for Medicaid which for over 50 years has never had any requirement like this.

While this plan sounds superficially good because it encourages work and personal responsibility, it is fraught with problems, and I expect it will do more harm than good. The idea that most people on Medicaid do not work is completely unfounded.

More than half of all adult Medicaid recipients already work and 78% live in a home where an adult works. The new rules are largely responding to stereotypes that see low income people as loafers and bums.

Considering how many people are already working, you have to ask if these new rules will do anything beyond knocking more people, who do not meet some new imposed requirement, off Medicaid.

Unfortunately, there are many ways that individuals can potentially have their Medicaid terminated that have nothing to do with a willful desire not to work.

People working lower-wage jobs are more likely to have irregular working hours or gaps in their employment. This is not because of the worker. Employers often schedule part-time hours for their own financial reasons. Workers who want to work may fall under the 100 hour a month marker because employers want them off their own health insurance coverage and they need to keep them under their own hourly threshold.

Lower-wage jobs typically offer fewer regular hours and are subject to seasonal changes. For example, food service, retail and construction jobs tend to be more volatile and less stable year-round. For instance, a holiday season may permit increased hours in retail whereas bad weather in winter can reduce hours for construction workers.

The work requirement rules assume low wage workers can find steady, regular full-time employment but the low wage job market is not like that. Many employers will not hire more than 24 hours a week because they want to avoid benefit costs. Even individuals who work substantial hours could lose coverage under the new work requirement.

Workers may not know in advance of the end of the month that they will fall under the 100 hour monthly threshold because employers may end up offering less hours. If workers fall under the threshold because of the wage-cutting actions of employers will that count against them?

How New Hampshire will interpret the failure of a worker to meet the 100 hour monthly threshold must be a matter of concern. Past experience in public benefits suggest many will be terminated from Medicaid due to a quite literal interpretation of rules and a bureaucratic approach.

Some workers will have difficulty verifying compliance with rules. For example, there are workers who may have difficulty producing pay stubs or timesheets even if they have worked.

The state will need to set up a new verification system. Red tape, backlogs and delays are a likely consequence. Many adult Medicaid beneficiaries lack internet access and will need to use snail mail or personal visits to prove compliance. It is not unusual for Medicaid beneficiaries to have transportation difficulties. The workers will still need to prove the work hours.

Homeless people will bring a unique set of issues. If you live in a shelter, you may have to choose between getting in line in the afternoon for a bed and working required hours. The lack of access to a shower or washing machines poses hygiene issues for workplaces. Also, not having a home mailing address or a working telephone can make employment success harder. Employment stability and just the ability to be in touch with an employer is compromised when there is no home.

Those with disabilities are at great risk. The term “medically frail” could mean many things and those claiming medical frailty will have to prove they qualify for an exemption. Obtaining necessary medical documents can be difficult especially if beneficiaries lack coverage. Low wage workers often may not have had any access to health care. It is much easier to get an exemption as a disabled person if you have a treating doctor.

Among those with disabilities, I would especially mention those with mental health issues. How will those with mental health issues fit under the definition of medical frailty? There are many who may not be in any disability program who have significant problems with concentration, clear thinking and social interaction. Those skills are often needed to meet documentation and reporting requirements.

The opioid crisis also must be noted. Will those with substance abuse disorders be seen as “medically frail”? How will work requirements impact recovery efforts? It is reasonable to assume that the burden of proving exemptions will cause people to lose coverage. Many people who suffer from substance abuse disorders have a hard time even acknowledging their condition.

Those who lose Medicaid or face an interruption in coverage can have very adverse health consequences. Those with chronic health conditions like diabetes or depression may require regular access to medications or other treatment. Disrupting access to care can impact the continuation of employability. Interruptions in coverage likely will mean increased emergency room visits and hospitalizations.

As a matter of public policy, I think it is a bad idea to make employment a precondition to Medicaid services. Work requirements actually block access to medically necessary services that individuals need to be able to work. The purpose of Medicaid has been to furnish medical assistance, rehabilitation, and other services that will help individuals attain and retain independence and self-care. Rather than making work a qualifying precondition, we need to see health care as a universal right.

Work requirements guarantee thousands more will be cut off health insurance. That is not the direction we as a society should be going.

According to the Center for Disease Control, over 28 million people in the U.S. under age 65 remain uninsured. That is a little over 12% of the population of those ages 18 to 64. Obamacare made some strides in reducing the number of the uninsured but not enough.

Universal coverage should remain the goal of health care advocates. Work requirements are rooted in uninformed, negative judgments about low income people. It is a safe bet these new requirements will do far more damage than good.